BUSINESS STUDIES MASTER

Simplifying Foundations of Business & Management for Class XI & XII

 

CBSE SAMPLE QUESTION PAPER (2026-27)

SUBJECT: BUSINESS STUDIES (054)

CLASS: XII | SA-1 (HALF YEARLY) | SET - 3

Time Allowed: 3 Hours Maximum Marks: 80

General Instructions

  • This question paper contains 34 questions. All questions are compulsory.
  • Questions 1 to 20 are objective-type questions carrying 1 mark each.
  • Questions 21 to 24 are short-answer type questions carrying 3 marks each.
  • Questions 25 to 30 are short-answer type questions carrying 4 marks each.
  • Questions 31 to 34 are long-answer type questions carrying 6 marks each.
  • Internal choices have been provided in select questions. You must attempt only one of the choices in such questions.
SECTION A
1.
Management is considered a multi-dimensional concept because it is a complex activity that encompasses:
(a) Management of work, people, and operations
(b) Management of planning, organizing, and staffing
(c) Management of economic, social, and political environment
(d) Management of science, art, and profession
[1]
2.
"The principles of management are not rigid prescriptions, which have to be followed absolutely." This highlights that principles of management are:
(a) Universally applicable
(b) Flexible
(c) Contingent
(d) Mainly behavioral
[1]
3.
The government of India passed a mandate requiring all automobile manufacturers to shift to BS-VI emission norms to curb pollution. As a result, companies had to upgrade their engine designs.
Which two dimensions of the business environment are highlighted here?
(a) Political and Social
(b) Legal and Technological
(c) Economic and Legal
(d) Social and Technological
[1]
4.
Which of the following is a standing plan that provides a broad contour to guide managerial thinking and decision making?
(a) Procedure
(b) Rule
(c) Policy
(d) Budget
[1]
5.
The form of organization known for giving rise to rumors and operating without any prescribed scalar chain is:
(a) Formal organization
(b) Divisional organization
(c) Informal organization
(d) Functional organization
[1]
6.
Which selection test is used to measure an individual's existing skills and level of knowledge already possessed in a specific area?
(a) Intelligence Test
(b) Aptitude Test
(c) Trade Test
(d) Personality Test
[1]
7.
A manager delegates complete authority to his team members, allowing them to set their own goals and solve their own problems without his interference.
Which leadership style is being followed?
(a) Autocratic
(b) Democratic
(c) Paternalistic
(d) Free-rein (Laissez-faire)
[1]
8.
In the controlling process, what is the immediate next step after the measurement of actual performance?
(a) Taking corrective action
(b) Analyzing deviations
(c) Setting performance standards
(d) Comparing actual performance with standards
[1]
9.
The principle of 'Esprit De Corps' suggests that management should promote:
(a) A team spirit of unity and harmony among employees
(b) Fair and just remuneration
(c) A strict scalar chain of command
(d) Stability of personnel
[1]
10.
Which technique of scientific management seeks to determine the standard time taken to perform a well-defined job?
(a) Motion Study
(b) Method Study
(c) Time Study
(d) Fatigue Study
[1]
11.
To attract candidates for the position of unskilled laborers, a factory manager puts up a notice on the notice board of the enterprise specifying the details of the jobs available.
This source of external recruitment is known as:
(a) Casual Callers
(b) Direct Recruitment
(c) Advertisement
(d) Labor Contractors
[1]
12.
The psychological barrier to communication where the receiver evaluates the message before the sender has completed it is called:
(a) Premature evaluation
(b) Lack of attention
(c) Distrust
(d) Loss by transmission
[1]
13.
Which of the following is an internal limitation of planning?
(a) Changes in government policies
(b) Natural calamities
(c) Planning creates rigidity
(d) Change in competitor's strategy
[1]
14.
Grouping of jobs of similar nature under one department (e.g., all production activities under the Production Department) results in a:
(a) Divisional Structure
(b) Functional Structure
(c) Network Structure
(d) Matrix Structure
[1]
15.
Providing car allowance, housing facilities, and medical aid to an employee over and above their regular salary is an example of which financial incentive?
(a) Profit Sharing
(b) Co-partnership
(c) Perquisites
(d) Bonus
[1]
16.
The principle of 'Management by Exception' suggests that:
(a) Managers should try to control every minor activity.
(b) Only significant deviations which go beyond the permissible limit should be brought to the notice of management.
(c) Actual performance should never be measured.
(d) Standards should be changed daily.
[1]
17.
Which of the following elements of the directing function refers to the process of guiding, instructing, and overseeing subordinates at work?
(a) Motivation
(b) Communication
(c) Leadership
(d) Supervision
[1]
18.
CLASS XII: SA 1 (HALF YEARLY) PRACTICE PAPER
Analyze the visual representation above. Which specific limitation of planning is most accurately depicted by the economic recession disrupting the forecast?
(a) Planning reduces creativity
(b) Planning involves huge costs
(c) Planning may not work in a dynamic environment
(d) Planning is a time-consuming process
[1]
19.
Assertion (A): Staffing is a continuous process.
Reason (R): An organization continuously needs to hire new people because existing employees may retire, resign, or be terminated, and new positions are created during expansion.
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
[1]
20.
Assertion (A): Controlling is both a backward-looking and a forward-looking function.
Reason (R): Controlling acts like a post-mortem of past activities to find out deviations, but the corrective action is taken to improve the future performance.
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not the correct explanation of A.
(c) A is true but R is false.
(d) A is false but R is true.
[1]
SECTION B
21.
Ramesh and Suresh both hold MBA degrees from the same prestigious institute. They have learned the exact same theoretical principles of management. However, Ramesh is managing his company very successfully because he creatively applies these theories to the unique and dynamic situations of his business, whereas Suresh applies the theories rigidly and is failing.
Identify the specific nature of management (Science, Art, or Profession) highlighted in the case above. Explain any two features of this identified nature.
[3]
22.
The HR manager of 'Pioneer Cements' found that the workers were frequently leaving the organization. To reduce this employee turnover, he introduced a system where workers were publicly awarded a 'Certificate of Excellence' on the notice board for achieving production targets.
Identify the element of Directing utilized by the HR manager. Furthermore, identify and briefly explain the specific type of incentive provided to the workers.
[3]
23.
Differentiate between 'Formal Organization' and 'Informal Organization' on the basis of: (a) Origin, (b) Flow of Communication, and (c) Authority.
OR
Differentiate between 'Delegation' and 'Decentralization' on the basis of: (a) Nature (Compulsory vs Optional), (b) Freedom of Action, and (c) Scope.
[3]
24.
Internal sources of recruitment are considered economical and highly motivating for existing employees. However, organizations cannot rely solely on them. State any three limitations of using internal sources of recruitment.
[3]
SECTION C
25.
In 'Vertex Textiles', the employees have formed an unofficial union. They often deliberately slow down their work to fulfill their personal agenda of forcing the management to increase their break times, completely ignoring the fact that the company has urgent export orders to fulfill. On the other hand, the management is also at fault. Even though the company is earning massive profits, the workers are paid wages that are barely enough to survive, leading to immense dissatisfaction and an unfair standard of living.
Identify and explain the two specific principles of general management (given by Henri Fayol) that are being violated by the employees and the management respectively in 'Vertex Textiles'.
[4]
26.
With the rapid advancement in 5G networks, a leading mobile phone manufacturer decided to completely overhaul its existing production line. However, before they could launch the new models, the Supreme Court of India passed a strict ruling mandating that all electronic devices must include a newly standardized, uniform charging port to reduce e-waste. The company had to instantly comply with this court order.
Identify and explain the two distinct dimensions of the business environment highlighted in the above scenario.
[4]
27.
Organizing involves a series of logical steps to structure the enterprise effectively. Explain the first four steps involved in the process of Organizing.
OR
Controlling ensures that the organizational activities are performed as per the plans. Explain the first four steps involved in the process of Controlling.
[4]
28.
The top management of 'Sunlight Dairies' established an end-result for the year: "To increase rural sales by 15%." To achieve this, a broad framework was designed stating that the company will only distribute products through local village cooperatives. To execute this, a strict, step-by-step chronological guide was given to the delivery drivers on how to load and unload the milk crates safely. Furthermore, a strict mandate was issued that any driver found smoking near the delivery vans will be instantly suspended.
By quoting the relevant lines from the paragraph, identify and explain the four different types of plans formulated by the management of 'Sunlight Dairies'.
[4]
29.
"Staffing is considered a crucial function of management because an organization is only as good as the people working in it." Justify this statement by explaining any four points highlighting the importance of the staffing function.
[4]
30.
Mr. David, the sales head, sent an email to his team stating, "We need to execute the new strategy immediately." He assumed his team understood that he meant the 'digital marketing strategy', but the team assumed he meant the 'door-to-door sales strategy'. Furthermore, Mr. David used highly complex corporate jargon in the email which the junior executives failed to comprehend. When one executive tried to translate the email into the local language for the field staff, the core meaning of the message was completely lost in translation.
Identify and explain the three specific semantic barriers to communication present in the case above.
[4]
SECTION D
31.
The manufacturing unit of 'Prime Motors' was plagued by chaos. The workers were using outdated, trial-and-error methods to assemble car engines, leading to massive wastage of time and resources. The management and the workers were in a state of constant conflict; the management suspected the workers were lazy, while the workers felt they were being exploited without a fair share of the profits. Furthermore, the management took all decisions unilaterally, never consulting the workers on the factory floor, which made the workers feel alienated and rebellious. A new manager, Mr. Kapoor, was hired. He immediately discarded the trial-and-error approach and conducted rigorous time and motion studies to find the 'one best way' to assemble the engines. He completely transformed the mental attitude of both the workers and management, urging them to realize they need each other to prosper. Finally, he established a system where workers' suggestions were actively welcomed and rewarded, ensuring they worked together as a team rather than as isolated individuals.
By quoting lines from the paragraph, identify and explain the **three principles of Scientific Management** (given by F.W. Taylor) that were successfully implemented by Mr. Kapoor to rescue 'Prime Motors'.
[6]
32.
'Global Innovations Ltd.' urgently requires an experienced Senior Software Architect. The HR department places a massive advertisement in top tech magazines. They receive 500 applications. The HR team meticulously reviews these applications and rejects 300 candidates who do not possess the required minimum qualifications. The remaining 200 candidates are called in for a rigorous written examination designed to test their logical reasoning, coding proficiency, and emotional maturity. Out of these, the top 20 candidates are invited for a face-to-face, in-depth conversation with the technical directors to evaluate their overall suitability and confidence. The directors select the best candidate, but before handing over the job offer, they call the candidate's previous employer to verify his character and employment history.
Identify the staffing function being performed by 'Global Innovations Ltd.' By quoting lines from the paragraph, identify and deeply explain the **first four sequential steps** of this process as executed by the company.
OR
Planning is a logical and systematic process that requires intellectual imagination rather than guesswork. Explain the first six sequential steps involved in the Planning Process of a large organization.
[6]
33.
'UltraLife Consumer Goods' was a highly successful company manufacturing only organic bathing soaps. They utilized a structure where all activities were grouped by functions like Production, Marketing, and Finance. Emboldened by their massive profits, they decided to expand aggressively. Within two years, they launched three entirely new and massive product lines: Organic Cosmetics, Herbal Teas, and Packaged Spices. Soon, the entire company was in chaos. The Marketing Head could not create effective advertising campaigns for soaps, cosmetics, teas, and spices simultaneously. When the Herbal Tea division suffered a massive financial loss, the CEO could not fix accountability because the Production Head blamed the Marketing Head, and vice versa, as all functions were mixed. Finally, the Board of Directors ordered the CEO to restructure the company by creating self-sufficient, autonomous units for each specific product line.
Identify the new organizational structure suggested by the Board of Directors. Explain **three specific advantages** 'UltraLife' will gain by adopting this new structure, and state **two major disadvantages** they must be prepared to face during this transition.
[6]
34.
Mr. Sharma joined 'Zenith IT Solutions' as a junior developer. Initially, his primary concern was merely to secure a job that paid a stable, sufficient salary so he could buy food, pay his rent, and support his family. Once he received a permanent employment contract, he felt secure about his future. However, after three years, despite having money and security, he felt isolated. He actively sought to join project teams and social clubs within the office to build friendships and feel a sense of belongingness with his colleagues. Two years later, having established a great network, his motivation shifted again. He now desperately desired the prestigious title of 'Lead Developer' and a private cabin to gain recognition and respect from the top management. Finally, after achieving all this, he reached a stage where he simply wanted to maximize his true potential and become the most legendary software architect in the entire industry, seeking highly challenging and creative tasks.
Identify the management theory of motivation highlighted in the case above. By quoting lines from the paragraph, identify and explain the **first four sequential needs** of Mr. Sharma as classified by this specific psychological theory.
[6]
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